New York, 8 September 2009

Net investments of $83 billion a year, a 50 per cent increase, must be made in agriculture in developing countries if there is to be enough food to feed over 9 billion people in 2050, according to a United Nations paper published today.

More than a third of this – $29 billion – would be needed for the two countries with the largest populations, India and China. Regionally, sub-Saharan Africa would require about $11 billion, Latin America and the Caribbean $20 billion, the Near East and North Africa $10 billion, South Asia $20 billion and East Asia $24 billion.

Required areas of investments include crops and livestock production, downstream support services such as cold chains, storage facilities, market facilities and first-stage processing, according to the paper prepared to the UN Food and Agriculture Organization (FAO) discussion paper for a High Level Experts’ Forum on How to Feed the World in 2050 to be held in Rome on 12 and 13 October.

Projected needs include some $20 billion for crop production and $13 billion for livestock, with mechanization accounting for the single biggest investment area, followed by expansion and improvement of irrigation. A further $50 billion would be needed for downstream services to help achieve a global 70 per cent expansion in agricultural production by 2050.

Most of the investment will come from private investors, including farmers purchasing implements and machinery and businesses investing in processing facilities.

Public funds will be needed to achieve a better functioning agricultural system and food security, including research and development; large-scale infrastructure such as roads, ports and power; and education, particularly of women, sanitation, clean water supply and healthcare.

But in 2000, total global public spending totalled only some $23 billion, and it has been highly uneven, the publication says. Official Development Assistance (ODA) to agriculture decreased by some 58 per cent in real terms between 1980 and 2005, dropping from a 17 per cent share of aid to 3.8 percent over the period. Presently it stands at around 5 per cent.

Foreign direct investment in agriculture in developing countries could make a significant contribution to bridging the investment gap, the paper says.

But political and economic concerns have been raised about so-called “land grab” investments in poor, food-insecure countries, it notes. Such deals should be designed in such a way as to maximize benefits to host populations, effectively increasing their food security and reducing poverty.

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